Amended in Assembly March 18, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 2472

Introduced by Assembly Member Linder

February 19, 2016

An act to begin delete amend Section 23400 of the Revenue and Taxation Code, relating to taxation. end delete begin insert add and repeal Section 17059.50 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 2472, as amended, Linder. begin delete Corporation Tax Law: alternative minimum tax. end delete begin insert Personal income taxes: credits: disabled veterans: service animals. end insert

begin insert

The Personal Income Tax Law allows various credits against the taxes imposed by that law.

end insert begin insert

This bill, for taxable years beginning on or after January 1, 2017, and before January 1, 2022, would allow a credit under the Personal Income Tax Law in an amount equal to 50% of the amounts paid or incurred during the taxable year by a qualified disabled veteran for the ownership and maintenance of a qualified animal, not to exceed $2,000 for a taxable year.

end insert begin insert

This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.

end insert begin delete

Existing law, the Corporation Tax Law, in modified conformity with federal law, makes a corporation subject to the alternative minimum tax under specified circumtances. Existing law provides that a corporation electing to be treated as an “S corporation” is not subject to the alternative minimum tax.

end delete begin delete

This bill would make a nonsubstantive change to that provision.

end delete

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert The Legislature finds and declares all of the
following: end insert

begin insert

(a) California is home to a large population of war veterans,
comprised of service men and women who have honorably served
in the line of duty.

end insert begin insert

(b) It is not uncommon for veterans, after experiencing the
horrors of war, to suffer from physical or mental health challenges,
or both.

end insert begin insert

(c) Common conditions war veterans are afflicted with include
post-traumatic stress disorder, traumatic brain injury, and
heightened anxiety.

end insert begin insert

(d) Trained animals are often used to assist disabled veterans
in their rehabilitation. An animal can greatly contribute to the
veteran’s sense of normalcy by providing support and
companionship.

end insert begin insert

(e) The purpose of Section 17059.50 of the Revenue and
Taxation Code, as proposed to be added by this act, is to create
an income tax credit for disabled veterans, as determined by a
disability rating promulgated by the United States Department of
Veterans Affairs, who incur costs associated with ownership of a
service dog.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 17059.50 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 17059.50. end insert   

(a) For each taxable year beginning on or after
January 1, 2017, and before January 1, 2022, there shall be
allowed a credit against the “net tax,” as defined by Section 17039,
an amount equal to 50 percent of the qualified costs of a qualified
disabled veteran, not to exceed two thousand dollars ($2,000) for
a taxable year.

(b) For the purposes of this section, the following definitions
shall apply:

(1) “Qualified animal” means a guide dog, signal dog, or
service dog as defined in subparagraph (C) of paragraph (6) of
subdivision (b) of Section 54.1 of the Civil Code.

(2) “Qualified costs” mean the amounts paid or incurred during
the taxable year by a qualified disabled veteran for the ownership
and maintenance of a qualified animal, including, but not limited
to, the amount paid as local fees for animal licenses; veterinary
care and medical-related expenses, such as vaccinations, annual
check-ups, and drug prescriptions; pet insurance coverage
expenses; expenses for speciality equipment, such as vests, leads,
and harnesses; grooming expenses; and food expenses.

(3) “Qualified disabled veteran” means an individual who meets
both of the following conditions:

(A) Has served on active duty with the Armed Forces of the
United States and received an honorable discharge for all periods
of active service.

(B) Has a service-connected disability as determined by a
disability rating promulgated by the United States Department of
Veterans Affairs and is assisted with that disability by a qualified
animal.

(c) In the case where the credit allowed by this section exceeds
the “net tax” the excess may be carried over to reduce the “net
tax,” in the following year, and succeeding years if necessary,
until the credit is exhausted.

(d) Section 41 does not apply to the credit allowed by this
section.

(e) This section shall remain in effect only until December 1,
2022, and as of that date is repealed.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert begin insert

This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.

end insert

begin delete

SECTION 1.  

Section 23400 of the Revenue and Taxation Code
is amended to read:

23400.  

(a) Part VI of Subchapter A of Chapter 1 of Subtitle
A of the Internal Revenue Code, relating to alternative minimum
tax, shall apply, except as otherwise provided.

(b) A corporation that elects under Chapter 4.5 (commencing
with Section 23800) to be treated as an “S corporation” shall not
be subject to the tax imposed by this chapter.

end delete